FREMONT, Calif.—WaferGen
Biosystems Inc., a shell company formed in Nevada,
completed in early June an acquisition of WaferGen Inc. through a "reverse
merger," a process under which a smaller company buys a larger company. As in
this case, the process often involves a private company buying a public one,
which avoids the time-consuming process of going public through an IPO.

As part of the merger, WaferGen Bio-systems also completed a
private placement of $10.7 million of common stock and warrants to accredited
investors, and followed that by closing a second private placement round a week
later to bring the total to $12 million. The company plans to use these
proceeds for general working capital, including strengthening of corporate
infrastructure and product offerings. This includes further development of its
whole-genome, high-throughput SmartChip system and the hiring of a chief
scientific officer, Dr. David H. Gelfand, whom the company calls "one of the
pioneers" in the area of PCR.

"This [merger] represents a major milestone for WaferGen,
positioning our company for accelerated growth," says Alnoor Shivji, a
co-founder of WaferGen who has been retained as chairman and CEO. "The financial
resources ...will enable us to accelerate sales and marketing activities around
our current SmartSlide products, further the development of our SmartChip
products and recruit additional key team members for our operations."

The company's primary product has been the SmartSlide, a
micro-incubator that features fluidic exchange designed to mirror physiological
conditions, for such purposes as stem cell research, cancer research, drug
interaction response and development, and cell culture process optimization.
The technology reportedly allows researchers to perform time lapse imaging
studies to characterize, differentiate and proliferate cells and grow stem
cells, primary cells and other difficult to cultivate cells in consistently
optimal conditions.

WaferGen's new SmartChip system, on the other hand, is being
developed to use semiconductor, optical and ink jet printing technologies, and
customized chemistries built into a content-ready chip, which reportedly will
allow researchers to conduct experiments without the need for advanced
preparation of reagents.

"What this means in terms
of general discovery work or specific tasks like target validation or biomarker
discovery is that researchers have a better opportunity to look at whole
genomes and not be as limited in terms of the sensitivity as they have with
other tools," Chadha says. "And in clinical trials, it means running studies on
high-throughput chips where you can run many patient samples at one time to cut
down on costs."